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Cybersecurity specialist Appgate to merge with Newtown Lane Marketing

Newtown Lane Marketing (Newtown) and Appgate have entered into a definitive merger agreement. The deal will see Appgate become a public company with significant financial resources to accelerate growth, scale, and go-to-market strategies. 

Appgate has also announced that a leading alternative investment manager with over USD12.5 billion in assets under management is investing up to USD100 million in convertible notes at a USD1 billion post-money valuation.

Headquartered in Miami with more than 360 employees, Appgate provides cybersecurity solutions for for private enterprises and government entities. Its secure access solutions include software defined perimeter (SDP), risk-based authentication, and digital threat protection, as well as offense-oriented professional services. Appgate’s flagship software solution, Appgate SDP, has achieved 125 per cent net dollar retention among its users and is recognised as an industry top performer, receiving 4.8 out of 5 stars from customer reviews on Gartner Peer Insights and named as one of the select “leaders” in the Forrester Wave Zero Trust eXtended Ecosystem (Q3 2020). Appgate serves over 650 customers, including Fifth Third Bank, Norwegian Cruise Lines, and Secureworks. In addition, government entities in the US Departments of Defense and Homeland Security rely on Appgate SDP to protect high value assets and processes.

Appgate was spun out of Cyxtera Technologies as a standalone company in January 2020 to accelerate its efforts in the rapidly changing cybersecurity industry. Today, Appgate is well positioned to capture long-term growth in the Zero Trust cybersecurity market that is expected to reach USD38 billion by 2025. Cybersecurity has never been more important or more in focus, and Appgate’s Zero Trust solutions ensure that network access is based on least-privileged access and movement within is eliminated, reducing the risk of attack even with greater numbers of remote workers and broader cloud adoption.

“This is a tremendous time of growth in our industry,” says Barry Field, Appgate’s Chief Executive Officer. “Appgate is displacing outdated, easily compromised, traditional network security, such as VPNs and firewalls, by using cutting-edge software designed around the principles of Zero Trust. Appgate is the partner of choice for forward thinking enterprises and federal customers who recognise the importance of adopting a Zero Trust strategy and preventing damaging attacks like ransomware.”

Under terms of the agreement, BC Partners and Medina Capital will remain Appgate’s majority shareholders and control approximately 74.4 per cent of Newtown’s common stock, on a fully diluted basis, which will total approximately 157.5 million shares post-closing assuming Appgate’s receipt of the full USD100 million convertible note investment. Under the terms of the investment, Appgate received USD50 million at the signing of the merger agreement to immediately further fuel growth, will receive USD25 million at closing, and will receive up to an additional USD25 million post-closing. BC Partners and Medina Capital will retain 100 per cent of their existing equity in the combined company for at least 12 months post-closing.

The combined company will seek to list its shares on the Nasdaq Stock Market or the New York Stock Exchange as soon as possible following consummation of the transaction and satisfaction of applicable listing requirements.

“The adoption of Zero Trust principles has never been more necessary, and we are proud to be a leader in this emerging and rapidly evolving sector,” says Manny Medina, Appgate’s Executive Chairman and Founder of Medina Capital. “Today’s announcement is the natural next step in Appgate’s evolution. As a public company, we will be able to continue to innovate, stay ahead of emerging security threats, and accelerate our revenue growth. All of that enables our customers, both private and public, to operate securely and with peace of mind.”

“We have been longtime supporters of Appgate, which is poised to be the winner in the emerging Zero Trust cybersecurity landscape,” says Fahim Ahmed, a Partner at BC Partners. “Today, Appgate is the only pure-play Zero Trust cybersecurity company that can implement effective enterprise-wide security for hybrid, cloud, and on-premises environments. As a result of this transaction, Appgate will intensify its efforts in this arena, bring an enhanced focus to helping protect enterprise and government information systems from today’s emerging threats, and act with precision and agility in a rapidly changing market.”

“Appgate is at the forefront of the cybersecurity industry, and we are delighted it has decided to merge with Newtown,” says Jon Ledecky, President and controlling shareholder of Newtown. “We have spent the past several years searching for an outstanding merger candidate for Newtown. In Appgate, we have found an exceptional company led by a proven, world-class management team backed by premier private equity firm, BC Partners, and a highly successful and innovative technology entrepreneur in Manny Medina.”

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